11-27-3 - Action by resolution of governing body -- Purposes for bond issue -- Exchange or sale -- Interest rate limitations inapplicable -- Principal amount -- Investment of proceeds -- Safekeeping a
11-27-3. Action by resolution of governing body -- Purposes for bond issue --Exchange or sale -- Interest rate limitations inapplicable -- Principal amount -- Investmentof proceeds -- Safekeeping and application of proceeds -- Computing indebtedness --Payment of bonds -- Combination issues -- Laws applicable to issuance -- Payment fromtaxes or pledged revenues.
(1) Any formal action taken by the governing body of a public body under the authorityof this chapter may be taken by resolution of that governing body.
(2) (a) The governing body of any public body may by resolution provide for the issuanceof refunding bonds to refund outstanding bonds issued by the public body or its predecessor,either prior to or after the effective date of this chapter, only:
(i) to pay or discharge all or any part of any outstanding series or issue of bonds,including applicable interest, in arrears or about to become due and for which sufficient funds arenot available;
(ii) to achieve a savings; or
(iii) to achieve another objective that the governing body finds to be beneficial to thepublic body.
(b) Any refunding bonds may be delivered in exchange for the outstanding bonds beingrefunded or may be sold in a manner, at terms, with details, and at a price above, at, or below paras the governing body determines advisable. The refunding bonds may be issued without anelection, unless an election is required by the Utah Constitution.
(c) It is the express intention of the Legislature that interest rate limitations elsewhereappearing in the laws of the state not apply to nor limit the rates of interest borne by refundingbonds.
(3) Advance refunding bonds may be issued in a principal amount in excess of theprincipal amount of the bonds to be refunded as determined by the governing body. This amountmay be equal to the full amount required to pay the principal of, interest on, and redemptionpremiums, if any, due in connection with the bonds to be refunded to and including their dates ofmaturity or redemption in accordance with the advance refunding plan adopted by the governingbody, together with all costs incurred in accomplishing this refunding. The principal amount ofrefunding bonds may be less than or the same as the principal amount of the bonds beingrefunded so long as provision is duly and sufficiently made for the retirement or redemption ofthe bonds to be refunded. Any reserves held or taxes levied or collected to secure the bonds to berefunded may be applied to the redemption or retirement of the bonds, or otherwise, as thegoverning body may determine.
(4) Prior to the application of the proceeds derived from the sale of advance refundingbonds to the purposes for which the bonds have been issued, these proceeds, together with anyother legally available funds, including reserve funds, may be invested and reinvested only ingovernment obligations maturing at such times as may be required to provide funds sufficient topay principal of, interest on, and redemption premiums, if any, due in connection with the bondsto be refunded or the advance refunding bonds, or both, in accordance with the advancerefunding plan. To the extent incidental expenses have been capitalized, these bond proceedsmay be used to defray these expenses.
(5) The governing body may contract regarding the safekeeping and application of theproceeds of sale of advance refunding bonds and other funds included with them and the incomefrom them, including the right to appoint a trustee, which may be any trust company or state or
national bank having powers of a trust company inside or outside the state. The governing bodymay provide in the advance refunding plan that until such monies are required to redeem or retirethe bonds to be refunded, the advance refunding bond proceeds and other funds, and the incomefrom them, shall be used to pay and secure payment of principal of, interest on, and redemptionpremiums, if any, due in connection with all or a portion of the advance refunding bonds or thebonds being refunded, or both.
(6) In computing indebtedness for the purpose of any applicable constitutional orstatutory debt limitation, there shall be deducted from the amount of outstanding indebtednessthe principal amount of outstanding general obligation bonds for the payment of which there hasbeen dedicated and deposited in escrow government obligations, the principal of or interest onwhich, or both, will be sufficient to provide for the payment of these general obligation bonds asto principal, interest, and redemption premiums, if any, when due at maturity or upon someearlier date upon which the bonds have been called for redemption in accordance with theirterms.
(7) When a public body has irrevocably set aside for and pledged to the payment ofbonds to be refunded proceeds of advance refunding bonds and other monies in amounts which,together with known earned income from their investment, will be sufficient in amount to pay theprincipal of, interest on, and any redemption premiums due on the bonds to be refunded as thesame become due and to accomplish the refunding as scheduled, the refunded bonds shall beconsidered duly paid and discharged for the purpose of any applicable constitutional or statutorydebt limitation.
(8) Refunding bonds and bonds issued for any other purpose may be issued separately orissued in combination in one or more series or issues by the same issuer.
(9) Except as specifically provided in this section, refunding bonds issued under thischapter shall be issued in accordance with the provisions of law applicable to the type of bondsof the issuer being refunded in effect either at the time of the issuance of the refunding bonds orat the time of issuance of the bonds to be refunded. Refunding bonds and coupons, if any,pertaining to them may bear facsimile signatures as provided in Section 11-14-304.
(10) Refunding bonds may be made payable from any taxes or pledged revenues, or both,or any assessments, special improvement guaranty funds, or other funds which might be legallypledged for the payment of the bonds to be refunded at the time of the issuance of the refundingbonds or at the time of the issuance of the bonds to be refunded, as the governing body maydetermine.
Amended by Chapter 105, 2005 General Session